EXHIBIT 10.1
January 18, 2002
Xx. Xxxxx Xxxx
President
Interplay Entertainment, Corp.
00000 Xxx Xxxxxx Xxxxxx
xxxxxx, XX 00000
Re: LETTER AGREEMENT AND AMENDMENT # 4 TO DISTRIBUTION AGREEMENT
Dear Mr. Caen:
This letter will serve to confirm the agreements we have reached in
connection with the Distribution Agreement dated August 23, 2001, between
Vivendi Universal Games, Inc., formerly known as Vivendi Universal Interactive
Publishing North America, Inc. ("Universal") and Interplay Entertainment Corp.
("Interplay"), as amended by Amendment #1 to Distribution Agreement, dated
September 14, 2001 ("Amendment #1"), Secured Advance and Amendment#2 ("Amendment
#2") executed in November, 2001, and Secured Advance and Amendment #3("Amendment
#3") dated December 13, 2001 (the "Distribution Agreement"). All capitalized
terms used herein and not otherwise defined shall have the meaning ascribed to
them in the Distribution Agreement.
1. Section 6.4 of the Distribution Agreement is hereby amended to state in
its entirety:
RECOUPMENT OF ADVANCE. "Thc Advance shall be recoupable by UNIVERSAL as
follows: UNIVERSAL shall be entitled to deduct from Interplay Proceeds otherwise
payable to Interplay with respect to each unit of Product distributed by
Universal an amount equal to the sum of (i) 20% of the Interplay Proceeds; and
(ii) 5% of the Price after deducting the General Reserve. Notwithstanding the
foregoing, Interplay shall have the right at any time during the term to return,
repay or otherwise reimburse UNIVERSAL the Advance without penalty of any kind
whatsoever.
2. In light of the changes made pursuant to the preceding paragraph, within
twenty-four hours after the complete execution of this letter agreement,
Universal will pay Interplay $1.1 million in Interplay Proceeds. This amount
represents Universal's best estimate of the additional Interplay Proceeds to
which Interplay would be entitled had the change reflected in the preceding
paragraph been made as of August 23, 2001.
3. Notwithstanding the provisions of Amendment #2 and Amendment #3, as to
50% of the New Advance and Second New Advance, Universal shall not exercise its
right to recoup such 50% unless and until Interplay has received $2.5 million in
Interplay Proceeds in any given month; provided, however, if by September 30,
2002, Interplay has not received $2.5 million in Interplay Proceeds in any given
month, then the preceding clause shall be disregarded and Universal shall,
beginning October 1, 2002, be entitled to recoup such 50% of the New Advance
and Second New Advance in accordance with the terms of Amendment #2 and
Amendment #3. The other 50% of the New Advance and Second New Advance shall at
all times be fully recoupable in accordance with Amendment #2 and Amendment #3.
4. In light of the changes made pursuant the preceding paragraph, upon
execution of this letter agreement, Universal shall pay to Interplay $1.75
million, which represents 50% of the New Advance and Second New Advance (i.e.,
$3.5 million being the amount estimated to have been recouped by Universal as a
result of sales through December 31, 2001).
5. Exhibit A to the Distribution Agreement is hereby replaced with the
document titled "Amended Exhibit A" attached to this letter agreement as Exhibit
A.
6. Concurrent with executing this letter agreement, Interplay and Universal
will enter into a Trademark Purchase and Sale Agreement substantially in the
form of Exhibit B.
7. Interplay and Universal shall, and shall cause their controlling
shareholders, directors, officers, employees, independent contractors, legal
representatives and financial advisors, and affiliates (and such affiliates'
controlling shareholders, directors, officers, employees, independent
contractors, legal representatives and financial advisors) to keep the terms of
this letter agreement, the Distribution Agreement, Amendment #l, Amendment #2,
and Amendment #3 and all negotiations, discussions, documents, drafts, email
communications and other correspondence and documentation relating thereto
confidential and not to disclose such information to third parties who do not
need the information in order for Interplay or Universal, as the case may be, to
enforce its rights or perform its obligations under the Distribution Agreement,
Amendment #1, Amendment #2, Amendment #3 or this letter agreement, except to the
extent that any such person or entity may be advised in writing by counsel that
he, she or it is required by law to disclose the same.
8. In connection with the Notice of First Breach, Notice of Second Breach,
Notice of Third Breach and Notice of Fourth Breach, each dated January 4, 2002,
and the Notice of Fifth Breach dated on or about January 10, 2002, and sent to
Universal by Interplay with respect to the Distribution Agreement, by executing
this letter, Interplay agrees as follows:
a. Interplay hereby withdraws the Notice of First Breach, Notice of Second
Breach and Notice of Fifth Breach and acknowledges and agrees that as a result
of this withdrawal, Universal shall not be deemed to have been in breach of the
Distribution Agreement at any time up to and including the date of this letter
agreement, particularly, but without limitation, to the extent that Interplay
subsequently claims that Universal failed to cure any alleged breach within the
time period specified in a Notice of Breach.
b. Interplay hereby withdraws the Notice of Third Breach and Notice of
Fourth Breach and agrees that the conduct complained of therein does not
constitute, and at no time has constituted, a breach of the Distribution
Agreement.
c. Interplay acknowledges and agrees that as a result of its withdrawal of
the Notices of Breach referenced herein, Universal shall not be deemed to have
been in breach of the Distribution Agreement at any time up to and including the
date of this letter agreement.
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9. Subject to the next sentence, the Distribution Fee provided for in
Section 6.2 of the Distribution Agreement shall be increased to 20% in the event
that, and for so long as, Interplay fails to deliver a final, approved gold
master of any of the Products listed below by the dates indicated below,
together with the English text of the manual for such product for use in the
packaging of such Products. Notwithstanding the preceding sentence, Interplay
may elect to deliver gold masters of one of the four Products below up to 30
days late without triggering the increase in the Distribution Fee described
above; provided that Interplay gives Universal written notice no less than one
week before receipt of the next scheduled royalty report of which product such
late product will be.
Run Like Hell. August 15, 2002
Hunter August 15, 2002
Icewind Xxxx Xxx 15, 2002
Matrix 45 days before the commercial release in the United States
of the Matrix II movie.
10. With respect to Section 5.1 of Amendment #3, Universal's distribution
rights in Australia shall take effect no later than April 1, 2002.
11. Commencing immediately upon complete execution of this letter
agreement, Universal and Interplay shall prepare an amended and restated version
of the Distribution Agreement which is mutually satisfactory to both parties and
reflects the terms of this letter agreement and the Distribution Agreement as
previously amended. Specifically, such amended and restated version of the
Distribution Agreement shall state the understanding of both parties that the
minimum royalty set forth in Amendment #1 shall not apply to any Product which
was first commercially released in the United States on or before August 23,
2001. The parties shall use their best efforts to complete the amended and
restated version by January 23 and in no event later than January 31, 2002.
12. Universal reserves all rights and remedies under the Distribution
Agreement (as amended). In particular, but without limitation, Universal
expressly reserves its right to recover through any means (including by way of
offset of amounts otherwise payable to Interplay under the Agreement) all sums
paid to Interplay pursuant to this letter agreement.
If you agree to the provisions set forth in this letter agreement, please
so indicate by signing the enclosed copy and returning it to me via facsimile,
followed by an original copy in the mail.
Sincerely yours,
/s/ Xxxxxx Xxxxxx
Xxxxxx Xxxxxx
Chief Financial Officer
Vivendi Universal Games, Inc
[Signature page follows.]
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I agree to the provisions of this letter agreement.
Dated: January 18, 2002 /s/ Herve Caen
----------------------------------------
Herve Caen, President and Board
Executive Committee member of Interplay
Entertainment Corp.
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